Rafid Ahmed Alwan al-Janabi, who was given the name Curveball by his US and German handlers, told the German secret service that Iraq had a secret biological weapons programme.

The 43-year-old defector's evidence was then passed to the CIA and became the primary source used by the US to justify invading Iraq.

Politicians in Iraq called for Curveball's permanent exile following his admission and poured scorn on his claim to want to return to his motherland and build a political party. "He is a liar, he will not serve his country," said one Iraqi MP.

In his adopted home of Germany, MPs are demanding to know why the German secret service paid Curveball £2,500 a month for at least five years after they knew he had lied.

Hans-Christian Ströbele, a Green MP, said Janabi had arguably violated a German law which makes warmongering illegal. He added that Gerhard Schröder, German chancellor around the time of the second Iraq war, should also reveal what he knew about the quality of evidence Curveball gave to Germany's secret service, the BND.

Under German constitutional law, it is a criminal offence to do anything "with the intent to disturb the peaceful relations between nations, especially anything that leads to an aggressive war", said Ströbele. The maximum penalty is life imprisonment, he said, adding that he did not expect it would ever come to that.

The MP said he would table a question to the Bundestag demanding to know whether the German secret service knew that Curveball was lying before the US-led invasion of Iraq in 2003. Schröder famously refused to join the "coalition of the willing" who took part in the second Iraq war.

Curveball told the Guardian he was pleased to have finally told the truth but that he was scared of the consequences. He said he had given the Guardian's phone number to his wife and brother in Sweden "just in case something happens to me".

In the US, questions are being asked of the CIA's handling of Curveball and specifically why the then head of the intelligence agency, George Tenet, did not pass on German warnings about Curveball's reliability.

Lawrence Wilkerson, chief of staff to the US secretary of state Colin Powell in the build-up to the invasion, said Curveball's lies raised questions about how the CIA had briefed Powell ahead of his crucial speech to the UN security council, where he presented the case for war.

Tyler Drumheller, head of the CIA's Europe division in the run-up to the 2003 invasion, said he welcomed Curveball's confession because he had always warned Tenet that Curveball may have been a fabricator. But the harshest criticism came from Iraq.

Jamal al-Battikh, the country's minister for tribes' affairs, said: "Honestly, this man led Iraq to a catastrophe and a disaster. Iraqis paid a heavy price for his lies – the invasion of 2003 destroyed Iraqi basic infrastructure and after eight years we cannot fix electricity. Plus thousands of Iraqis have died. This man is not welcome back. In fact, Iraqis should complain against him and sue him for his lies."

Others poured scorn on Curveball's plan to return to Iraq and enter politics.

Intefadh Qanber, spokesman for the Iraqi National Congress (INC), led by Ahmed Chalabi, said: "He is a liar, he will not serve his country. He fabricated the story about WMD and that story gave the USA a suitable pretext to lead the 2003 invasion, which hurt Iraq. For most Iraqis, it was obvious that Saddam was a dictator, but they wanted to see him ousted on the basis of his crimes against human rights, not a fabricated story about weapons of mass destruction."

In the US, a pressure group representing veterans of the Iraq war demanded the justice department open an investigation into the INC's relationship to Curveball.

Chalabi, who was very close to the former US vice-president Dick Cheney in the decade leading up to the 2003 invasion, has often been accused of being the man behind Curveball. It has long been known that Chalabi provided the CIA with three other sources who lied about Saddam's WMD capability. But when asked by the Guardian, Janabi and Chalabi denied knowing each other.

Rafid Ahmed Alwan al-Janabi's testimony was one of the key planks of the argument for the ousting of Saddam Hussein. Roll over the blue markers on the timeline below to follow the events that led to conflict ...